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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 531508ISIN: INE128A01029INDUSTRY: Dry Cells

BSE   ` 333.50   Open: 340.10   Today's Range 331.55
340.10
-0.40 ( -0.12 %) Prev Close: 333.90 52 Week Range 273.40
441.55
Year End :2022-03 

i) The Company has not revalued its property, plant and equipment during the year ended March 31, 2022 and March 31, 2021

i i) The Company does not have any immovable property, whose title deeds are not held in the name of the Company during the year ended March 31, 2022 and also as at March 31, 2021.

iii Freehold land and buildings with a carrying amount of ' 8,171.81 Lakhs (as at March 31, 2021: ' 8,453.93 Lakhs) have been pledged to secure borrowings of the Company (Refer Note 17 and 20).

iv) Plant and equipments, furniture and fixtures, vehicles and office equipments with a carrying amount of ' 8,322.26 Lakhs (as at March 31, 2021: ' 8,626.87 Lakhs) have been pledged to secure borrowings of the Company (Refer Note 15 and 20).

Capital work-in-progress consist primarily of expenditure towards acquisition of battery manufacturing machineries.

The cost of inventories recognised as an expense includes ' 563.93 Lakhs (for the year ended March 31, 2021: ' 597.08 Lakhs) in respect of writedown of inventory on account of obsolescence/adjustments and provision for slow moving/non-moving inventory. There has also been reversals of write-down NIL (for the year ended March 31, 2021 NIL)

The mode of valuation of inventories has been stated in Note 2.15.

I nventories amounting to ' 24,071.74 Lakhs (as at March 31,2021: ' 24,542.94 Lakhs) have been pledged to secure borrowings of the Company (Refer Note 20). Details of charge has been given on the basis of records available with Registrar of Companies.

The average credit period on sale of goods is 10 days. No element of financing is deemed present and the sales are generally made with an average credit term of 10 days, which is consistent with market practice. The Company does not have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds 1 year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

Customers seeking appointment to dealership are approved by the Regional Head of Sales for a channel after completing the Customer Business Data Form, alongwith all necessary documents. New customers are usually on advance payment terms for three months. Customers seeking supply on credit after the stipulated period are extended the facility after evaluation by the Regional Head of Sales for the channel alongwith the Regional Commercial Manager. Sufficient proof of solvency has to be provided by the customer seeking credit. The credit limits are reviewed once every year in April.

(i) The Company's maximum exposure to credit risk with respect to customers as at March 31,2022'766.22 Lakhs (as at March 31, 2021: ' 746.71 Lakhs), which is the fair value of trade receivables less impairment loss as shown below. There is no concentration of credit risk with respect to any particular customer.

Trade receivables amounting to ' 3,558.21 Lakhs (as at March 31,2021: ' 3,541.83 Lakhs) have been pledged to secure borrowings of the Company (Refer Note 20). Details of charge has been given on the basis of records available with Registrar of Companies.

(ii) Terms / rights attached to equity shares:

The Company has one class of equity shares having a par value of ' 5/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution shall be according to the members right and interest in the Company.

Pursuant to the Taxation Laws (Amendment) Ordinance, 2019 issued on September 20, 2019, corporate assesses have been given the option to apply lower income tax rate with effect from April 01, 2019, subject to certain conditions specified therein. The Company has carried out an evaluation and based on its forecasted profits, believes it will not be beneficial for the Company to choose the lower tax rate option in the near future. Accordingly, no effect in this regard has been considered in measurement of tax expense for the year ended March 31, 2022. The Company will, however, continue to review its profitability forecast at regular intervals and make necessary adjustments to tax expense when there is reasonable certainty to avail the beneficial (lower) rate of tax.

33 ADDITIONAL INFORMATION TO THE STANDALONE FINANCIAL STATEMENTS 33.1 Contingent liabilities & commitments (to the extent not provided for)

' Lakhs

Particulars

As at March 31, 2022

As at March 31, 2021

(i) Contingent liabilities

(a) Penalty imposed by Competition Commission of India ("CCI") on the Company and on certain officers of the Company (Refer note below #)

17,208.41

17,208.41

(b) Claims against the Company not acknowledged as debts:

- Excise & Customs *

1,548.33

1,534.70

- Sales tax

32.65

37.54

* Excludes interest claimed in a few cases by respective authorities but amount not quantified.

(c) Others (includes ESI, property tax, water tax etc.)

218.16

218.16

(ii) Guarantees

589.81

656.39

(iii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

- Property, plant and equipment

1,348.09

507.01

- Intangible assets

82.22

18.01

Note:

# The Competition Commission of India ("CCI") issued an Order dated April 19, 2018, imposing penalty on certain zinc carbon dry cell battery manufacturers, concerning contravention of the Competition Act, 2002 (The Act). The penalty imposed on the Company was ' 17,155 Lakhs. The Company filed an appeal and stay application before the National Company Law Appellate Tribunal, New Delhi, (NCLAT) against the CCI's said Order. Since then, the NCLAT vide its order dated May 09, 2018, has stayed the penalty with the direction of depositing 10% of the penalty amount within 15 days with the Registry of the NCLAT. The Company has complied with the said direction of the NCLAT. Meanwhile, the Company received legal advice to the effect that given the factual background and the judicial precedents, there are reasonable grounds on the basis of which the NCLAT will allow the appeal and will either adjudicate upon the quantum of penalty imposed or remand it to the CCI for de novo consideration. It may also be noted that a certain amount of penalty will be levied on the Company as it had also earlier filed an application under the Lesser Penalty Regulations under the Act. However, at this stage it is not possible to quantify or even make a reasonable estimate of the quantum of penalty that may be imposed on the Company. According to the aforesaid legal advice, the matter should be recognized as a contingent liability as defined under Ind-AS 37 and there should be no adjustment required in the financial statements of the Company in accordance with Ind-AS 10. Accordingly, pending the final disposal of the appeal, the amount has been disclosed as contingent liability in the financial statements. It may also be noted that penalty imposed in this connection on certain officers of the Company amounting ' 53.41 Lakhs has been included in the above.

33.2 Particulars of Loans, Guarantees or Investments covered under Section 186(4) of the Companies Act, 2013

No loans, guarantees and investments have been given/provided/made during the year ended March 31, 2022.

Interest bearing (which is not lower than prevailing yield of related Government Security close to the tenure of respective loans) loans and recoverables to Babcock Borsig Ltd., Mcnally Bharat Engineering Company Ltd., Williamson Financial Services Ltd, Seajuli Developers & Finance Ltd., Woodside Parks Ltd. and Williamson Magor & Co. Ltd. outstanding at the year ended March 31, 2022 were '7,600.00 Lakhs, Nil, Nil, ' 27,080.00 Lakhs, ' 8,000.00 Lakhs and ' 6,048.77 Lakhs respectively and maximum amount outstanding during the year was ' 7,600.00 Lakhs, Nil, Nil, '27,080.00 Lakhs, ' 8,100.00 Lakhs and ' 6,148.77 Lakhs respectively, for their business purposes.

a) During the year ended March 31, 2021 the Company has provided for impairment loss against above outstanding loans & recoverables.

b) The aforesaid outstanding balances do not include accrued interest on such loans and recoverables as the amounts have been written off during the year ended March 31,2021 following the principles of accounting prudence. Similarly, no interest has been accrued on these loans and recoverables during the year ended March 31, 2022 applying the same rules of accounting prudence.

Provident Fund

Contributions towards provident funds are recognised as an expense for the year. The Company has set up a Provident Fund Trust which is administered by Trustees. Both the employees and the Company make monthly contributions to the fund at specified percentage of the employee's salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment.

The Trust invests funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Government under The Employees Provident Funds and Miscellaneous Provisions Act, 1952' and shortfall, if any, on account of interest is to be made good by the Company.

The Actuary has carried out actuarial valuation of plan's liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, no amount is required to be provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Disclosures given hereunder are restricted to the information available as per the Actuary's Report.

Total amount charged to the Statement of Profit and Loss for the year ended March 31, 2022 '377.29 Lakhs (For the year ended March 31, 2021: '340.40 Lakhs).

Pension fund

Contribution towards Pension fund -total amount charged to the Statement of Profit and Loss for the year ended March 31,2022 '542.94 Lakhs (For the year ended March 31, 2021: '578.02 Lakhs).

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020 and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact, once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

Segment information

The Company is engaged in the business of marketing of dry cell batteries, rechargeable batteries, flashlights, general lighting products and small home appliances which come under a single business segment known as Consumer Goods. The financial performance relating to this single business segment is evaluated regularly by the Managing Director and Chief Financial Officers (Chief Operating Decision Makers).

33.9.3 Financial risk management objectives

The Company endeavours to manage the financial risks related to it's operations through specified policies, which deals with various market risks (foreign currency exchange risk, interest rate risks and commodity price risks), credit risks and liquidity risks. In order to minimize any adverse effects on the financial performance of the Company, derivative financial instruments like foreign exchange forward contracts, commodity future and option contracts, maintaining proper mix between fixed and floating rate of borrowings are undertaken to hedge the various financial risks as per guidelines set in those policies. Credit risk management is done through managing credit limits and transactions through letters of credit. Liquidity risk is managed through availability of committed credit lines and borrowing facilities.

33.9.4 Market risk

The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and commodity prices in international markets. The Company enters into foreign exchange forward contracts and commodity futures contracts to manage it's market risks.

33.9.5 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Exchange rate exposures are managed within the approved policy utilising forward foreign exchange contracts as and when required depending upon market volatility.

33.9.6 Interest rate risk management

The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings contracts.

33.9.6.1 Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for non-derivative instruments (borrowings) at the end of the reporting period. For liabilities with floating rate, the analysis is prepared considering average amount outstanding at the end of each month. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates. If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Company's:

• Profit before tax for the year ended March 31, 2022 would decrease/increase by ' 237.96 Lakhs (for the year ended March 31, 2021: decrease/ increase by ' 229.20 Lakhs). This is mainly attributable to the Company's exposure to interest rates on its variable rate borrowings.

33.9.7 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The Company's exposure of its counterparties are continuously monitored.

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance cover is purchased.

Concentration of credit risk to any counterparty did not exceed 5% of gross monetary assets at any time during the year.

In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks. The Company's maximum exposure in this respect is the maximum amount the Company could have to pay if the guarantee is called on. As at March 31, 2022, an amount of NIL (as at March 31, 2021 an amount of NIL) and other bank guarantees amounts to ' 589.81 Lakhs as at March 31, 2022 (as at March 31, 2021: ' 656.39 Lakhs) has been considered as contingent liabilities (see note 33.1). These financial guarantees have been issued to banks under the supply agreements entered into with certain vendors.

33.9.7.1 Collateral held as security and other credit enhancements

The Company does not collect any collateral or other credit enhancements to cover its credit risks associated with its financial assets.

33.9.8 Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

33.11 Additional disclosures relating to the requirement of revised Schedule III

33.11.1 Loans or advances (repayable on demand or without specifying any terms or period of repayment) to specified persons

During the year ended March 31, 2022 the Company did not provide any Loans or advances which remains outstanding (repayable on demand or

without specifying any terms or period of repayment) to specified persons (Nil as on March 31, 2021).

33.11.2 Relationship with Struck off Companies

The Company did not have any transaction with companies struck off during the year ended March 31, 2022 and also for the year ended March 31, 2021.

33.11.3 Disclosure in relation to undisclosed income

The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year ended March 31,2022 and March 31, 2021 in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

33.11.4 Details of Benami Property held

The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company, during the year ended March 31, 2022 and March 31, 2021 for holding any Benami property.

33.11.5 Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31, 2022 and March 31, 2021.

33.11.6 Utilisation of Borrowed Fund & Share Premium

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

The Company has not advanced or lent or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

Certain first pari passu charges on immovable properties of the Company, for the term loans extended by IndusInd Bank Ltd. and RBL Bank Ltd., are yet to be created on account of the Company having been inter alia restrained from encumbering or creating third party rights on the assets of the Company in terms of the Order of the Hon'ble High Court of Delhi, in reference to a matter filed against some of the promoters of the Company.

In the event of the creation of the charges above, the said charges would be registered with ROC, Kolkata, within the statutory period.

The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

Impact of COVID-19

The Company has taken into account all the possible impacts of COVID-19 in preparation of these standalone financial statements, including but not limited to its assessment of, liquidity and going concern assumption, the recoverability of property plant and equipments, receivables, intangible assets, cash and cash equivalent and investments. The Company has carried out this assessment based on available internal and external sources of information upto the date of approval of these financial statements and believes that the impact of COVID-19 is not material to these financial statements and expects to recover the carrying amount of its assets. The Company will continue to monitor future economic conditions and its consequent impact on the business operations, given the uncertain nature of the pandemic.

Figures of the previous year have been regrouped/rearranged wherever considered necessary.

Approval of financial statements

The financial statements were approved for issue by the Board of Directors on April 25, 2022.